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Enforcing the rules

The proposal to punish Indiana businesses that "knowingly employ" illegal immigrants is still alive in the General Assembly. For those who think such a law won't work, consider the Arizona experience:

PHOENIX, Arizona (AFP) — One month after Arizona introduced a law cracking down on businesses which employ illegal immigrants, Latino workers are fleeing the state and companies are laying off employees in droves, officials and activists say.

[. . .]

The effects of the law have been immediate, according to businessmen, workers and rights activists who spoke to AFP, with companies driving up wages to attract labor while being forced to part company with prized employees.

Incentives work, even negative ones. Companies afraid of losing their licenses quickly start complying, and the illegal workers start looking elsewhere. If anything, Indiana's proposal isn't tough enough. A company would lose its license to do business only after accumulating three violations in 10 years. That's not much of an incentive to change quickly.

But we should also study all the effects -- good and bad -- in Arizona. Illegal immigrants are going to other states or back to Mexico, and some companies are starting to offer higher wages to attract American workers. But that will have a ripple effect, creating higher costs in general.

States are just trying to fill the void left by the federal government's abdication of its responsibilities. It should be obvious that if we really, truly want to "solve" the "problem" of illegal immigration, this is the way to do it. If we take away the reason for them to come here, "border security" becomes less of a problem.

Comments

Any word on the effect this has on legal immigrants? I can definitely see businesses avoiding even legal immigrants or just people with funny names out of an abundance of caution. Why take a risk?

A J Bogle

Mon, 01/28/2008 - 12:55pm

Actually it sounds like it is working the way it should. Globalization and illegal immigration is suppressing middle and working class wages - it was short circuiting the natural process of supply and demand - if there is a demand for workers then it should be reflected in wages.. This whole myth of "jobs americans won't do" can now be completed with the statement "at the wages companies want to pay". The wall Street Journal, and The New York times both said the effects of raising these wages is tallied in pennies, not double and triple such as the scare tactic folks would have you believe